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Working mother loses out under Universal Credit

The Northern Ireland High Court recently ruled, in a case brought by the Law Centre, that different treatment of working mothers under Universal Credit was justified.

Law Centre NI brought the case on behalf of our client, RK, who was granted anonymity by the Court. RK is a lone parent who worked for many years before expecting her first child. At an early stage of her pregnancy, she moved to take up work with a new employer. This meant that she did not have the continuous period of employment in her new workplace that was necessary for her to claim Statutory Maternity Pay. Instead, when she went on maternity leave, she was required to claim Maternity Allowance.

Under the Universal Credit rules, Maternity Allowance and Statutory Maternity Pay are treated differently. In calculating an award of Universal Credit, a large proportion of income from Statutory Maternity Pay is ignored as ‘earned income.’ Income from Maternity Allowance, on the other hand, is treated as ‘unearned income’ and deducted entirely from an award of Universal Credit. Had our client been able to claim Statutory Maternity Pay, she would have been £3,600 better off. RK’s case was referred to the Law Centre’s legal team by advisers at Ligoniel Improvement Association

Law Centre NI launched judicial review proceedings to challenge the application of rules which leaves some working mothers worse off than others at a time when they are facing the costs of preparing for the arrival of a new baby. We argued that the different treatment of Universal Credit claimants depending on whether they received Statutory Maternity Pay or Maternity Allowance was discriminatory under the terms of the European Convention of Human Rights.

After the Law Centre case was lodged, the High Court in England and Wales ruled in a similar case [Moore v Secretary of State for Work and Pensions [2020] EWHC 2827 (Admin)], that the difference in treatment was justified, including because of the administrative difficulties in managing the system in a different manner.

Although the High Court in Belfast expressed a degree of sympathy with RK’s situation, it adopted the approach of the High Court in England and Wales in deciding that the difference in treatment was proportionate and justified.

Speaking after the judgment in the High Court, Head of Social Security at Law Centre NI, Owen McCloskey, said:

“We are disappointed with the outcome for our client and others in similar positions. The sole fact that she had changed employment when pregnant meant she had to claim Maternity Allowance instead of Statutory Maternity Pay and became worse off in the long run when she needed to make a claim under Universal Credit. The Court acknowledged the Government’s policy was justified due to challenges in administering the Universal Credit system in a different way and because of a policy desire to incentivise stable rather than sporadic employment.”